My take: It was not an intentional act by Wal-Mart. I think it was programmed into a black film category by a lone sick employee and Wal-Mart should track the perp down and fire his or her a**.

Hooray for resisting the conspiracy theory, but even the "lone sick employee" idea is jumping the gun, imho. Wal Mart sells aproximately ninety gajillion videos, and even with God's own proofreader a lot of errors are going to slip through with or without malice. And given enough errors, some are bound to be offensive.
The "similar items" system is mostly down now, but I noticed that "24" is listed as similar to "Seinfeld" (link may die). It's even the only show listed as similar. An inoffensive error like that suggests that errors can creep in with no malice.

Whoops, forgot to disclose that I used to work for Wal-Mart. As a cashier. I hated that job like having a popcorn kernel stuck between my tooth and gum.
Since I'm burning my #2 post for the day, I'll point out this from Wal-Mart's statement:

To further illustrate the bizarre nature of this technical issue, the site is also mapping movies such as Home Alone and Power Puff Girls to African American literature.

A non-African American themed documentary about surfers, Riding Giants, links to the same list of seemingly unrelated fantasy films that the King biopic does, including Polar Express and Charlie and the Chocolate Factory.

Which further demostrate that the system was making nonsensical links, but can't be double-checked because the system is disabled.

Cross-posted (commented?) at Firedoglake.
This might night be want you all want to hear, but it is fact.
The folks who run the Wal-Mart website, both on the tech and business sides are based just outside San Francisco.
Most of them are young singles who live in the City. The vast majority of those people are highly intelligent, articulate lefties quite at home with the rest of the readers and commenters on this blog.
I realize that many on the left hate Wal-Mart with all their hearts, but it might be better to consider all facts before jumping to extreme conclusions (and yes, loudly trumpeted charges of racism are quite extreme) on very few data points.

Roy makes a good point but Iām still skeptical. WM stocks around 30,000 titles (from their website). Letās say each one is references in two categories and the referencing process is 99% accurate. This gives us about 600 titles that would be inaccurately (and hopefully randomly) distributed across these categories. Now, I only find ~14 categories on WM main page but given that āblackā titles isnāt one of them Iāll assume there are subcategories; lets try 30 just to see how the numbers shake out. So the probability that a given title is categorized incorrectly and then makes it into a given subcategory is about 7 in 100,000.
But thatās just this title and this category. How many of the incorrectly categorized titles would seem innocuous in their improper categories and how many would seem malicious? Thatās very difficult to answer and could easily move the estimate from improbable to likely. Anyway, with black Americaās spending money at stake Iām certain WM wouldnāt dream of doing anything that would seem overtly racist.
By the way, has Roy been limited on his comments? Hope not.

Looks like theyāve pulled the āsimilarā feature for their movies. However, the feature still works for their books. It seems to be a system similar to Amazonās āpeople who bought this also boughtā. For example, if you bought MLKās complete papers from WM you likely bought Al Frankenās āthe truthā or (strangely) āthe politically incorrect guide to islamā.

CalDevil,
Young singles living in San Francisco are not all liberal. There are plenty of young people here in New York who are as reactionary as they come. I'd even suspect that living in what is perceived as a haven for leftism might drive such a person to exactly this kind of passive-aggressive action.
I don't think anyone is condemning Wal-Mart's web staff as a whole...it looks like the smart money is on one lone prankster with an ugly sense of humor.

WM stocks around 30,000 titles (from their website). Let's say each one is references in two categories and the referencing process is 99% accurate.

Thanks for the correct number, I assumed it was much larger. But I still suspect they have a lot more categories than what the website lists. I don't mean sub-categories, I mean disjoint sets that cut across the publicized categories. They probably have them grouped by profit margin, for instance. With each new category, or new mechanism for looking at a category, comes the opportunity for human or computer error. More ways to misfile a title, more ways to miscalculate similarity, more data to check for correctness.

So the probability that a given title is categorized incorrectly and then makes it into a given subcategory is about 7 in 100,000.

Independent of specific numbers, there's a problem with that kind of analysis: selection bias. An offensive error may not be any more likely to be produced, but it's more likely to be noticed, and waaay more likely to show up in the newspaper.
Plus, software bugs often produce results that are just plain weird until you understand the inner workings. If they can be explained with probability distribution, the probabilities might not be based upon the data the code is supposed to be working on. Increment a counter before you're supposed to and your widget analysis algorithm will read a doodad's mass as a widget's volume. And the mistake will seem obvious in hindsight.
Everything I've said is just wishy-washy speculation to show why human error or a bug are plausible explanations, and consistent with the other reported (unconfirmed) weird links. I can't address the possibility of malice. But when we're talking about somebody's job, or the PR problems of a publicy-traded corporation, it's good to be thorough.

Did a lone employee do this without getting permission? In all likelihood, yes. Was that employee pretty sick? Yes.
But, Wal-Mart isn't off the hook either. Wal-Mart has a culture and that culture makes Wal-Mart a comfortable place for sickos like this person to work. Similar, humor is probably common around the water cooler in the office where the web guy who did it works. He or she probably wasn't subtle enough to know that there is a difference between jokes that he or she thinks are funny around the water cooler, and what the general public in this country thinks is funny or appropriate (computer geeks, alas, sometimes living up to the socially inept stereotypes that exist about them -- similar things happened in the TSA's no fly list program).
So yes, one guy did it and the company responded promptly. But, in my opinion it is likely to be more of a symptom of a corrupt internal culture than either a true abberation or an actual conspiracy.

TPS & Ohwilleke,
I understand the desire to vilify Wal-Mart and it's "culture", but you are ignorant of the facts. If this is the work of a rogue employee, a theory I do not buy (much more likely to be the work of ordinary algoritmic-based programs picking up featured and promoted products - MLK day is coming up and Wal-Mart, like most retailers, is very seasonally driven), that person would be immediately dismissed outright regardless of whether this ever was publicized.
Most companies, including Wal-Mart (perhaps even more so) do not tolerate such behavior. For the past few years, Wal-Mart has been very quick to fire employees even on unsubstantiated allegations of misconduct affecting the public, customers or other employees. This turnabout was primarily due to the fact that its prior policy of defending such employees unless there was clear evidence supporting the allegations, caused them to be burned in verdict after verdict.
This newer policy sucks for accused employees, but benefits Wal-Mart since it's based on simple economics rather than justice (usually a very elusive concept in she/he said - she/he said types of matters). The quicker Wal-Mart acts on any allegations of wrongdoing by its employees, the less likely it will have to pay large damages later.

tps12 and ohwilleke,
How do the (unconfirmed) other weird links figure into your lone prankster theory? Supposedly "Power Puff Girls" and "Home Alone" listed the black-themed movies too, which wouldn't seem to create any racist overtones.
And here's another article, including something to look forward to later today:

Williams said on Friday that the company has discovered part of what happened and will update investors later in the day.

Probably after the NYSE closes. I suspect we'll get a decent explanation from the company. With all this attention they have a strong financial incentive to fix the problem and to convince the public that they fixed the problem. They might lie about the cause if it was intentional, but Wal-Mart Whistleblowers are a hot commodity right now so I don't think they'd risk a cover-up.

A business manager had grouped ``Martin Luther King: I Have a Dream'' with three other black-themed movies and assigned the package an overly broad category of DVD boxed sets, Cast said.

...

Cast said walmart.com would only start cross-referencing movies again once it has a new system in place to avoid a repeat. That could be a technology more like what Amazon.com uses or another approach, he said.

Sounds like they're going to take a significant financial hit to prevent similar problems in the future. Those b*stards.